S Corporation Tax Compliance Challenges

Overcoming Hurdles for 1120S Filers: Loan Treatment, Entity Formation, Tax Rate Planning and Others

Recording of a 110-minute CPE/CLE webinar with Q&A

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Conducted on Thursday, April 1, 2010

Recorded event now available

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Course Materials

This CLE course will identify persistent and complex compliance challenges with forming the initial S corporation entity and filing tax returns. A panel with extensive S corporation experience will guide advisors and taxpayers on alternatives to improve taxpayer performance in the most vexing areas.


A recently released Government Accountability Office study found that roughly 68% of the S corporation tax returns studied misreported at least one item, such as an ineligible expense deduction. These findings underscore that proper compliance often remains very difficult for Form 1120S filers.

Making and maintaining a proper, viable S corporation, evaluating which entities should hold S corporation shares, planning for possible increases in federal tax rates, and calculating basis in shareholders' distributions of S corporation loans are just some of the challenges.

The proper handling of basis in the back-to-back loans frequently used by U.S. corporations is also vexing. Insights from tax advisors who work routinely with S corporations can help advisors and taxpayers using these entities make better decisions with these ongoing compliance challenges.

Listen as our panel of experienced federal tax specialists analyzes the most problematic S corporation compliance issues and offers potential solutions.



  1. Ongoing S corporation compliance challenges
    1. Initial entity election
    2. Maintaining the S corporation election
    3. Distributing S corporation shares among holders
    4. Decisions about allocating basis in S corporation debts
      1. E.g. back-to-back loans
    5. Planning for possible tax rate changes
    6. Other compliance challenges
  2. Analysis of possible options for improving compliance in each area


The panel will address these and other key topics for Form 1120S filers:

  • The S corporation election: Handling the tricky aspects of the initial election and maintaining entity status.
  • S corporation shares: Deciding which entities should hold them and evaluating whether they remain the right entities to use.
  • Basis decisions: Accurately calculating shareholder basis in back-to-back loans and other categories of S corporation debt.
  • Tax rate planning: What will happen if the federal government raises income tax rates as expected?


William C. Staley
William C. Staley

Law Offices of William C. Staley

He specializes in tax planning and general business law for closely held businesses and has presented on S corporation...  |  Read More

C. Wells Hall, III
C. Wells Hall, III

Mayer Brown

He specializes in advising clients on the tax implications of acquisitions, reorganizations, restructuring of business...  |  Read More

George Spaeth
George Spaeth
Managing Director

He is assigned to the firm's Partnership and Pass-Through Group, assisting local offices with partnership and S...  |  Read More

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